Secret Service Investigates Breach at U.S. Govt IT Contractor

September 9, 2019
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The U.S. Secret Service is investigating a breach at a Virginia-based government technology contractor that saw access to several of its systems put up for sale in the cybercrime underground, KrebsOnSecurity has learned. The contractor claims the access being auctioned off was to old test systems that do not have direct connections to its government partner networks.

In mid-August, a member of a popular Russian-language cybercrime forum offered to sell access to the internal network of a U.S. government IT contractor that does business with more than 20 federal agencies, including several branches of the military. The seller bragged that he had access to email correspondence and credentials needed to view databases of the client agencies, and set the opening price at six bitcoins (~USD $60,000).

A review of the screenshots posted to the cybercrime forum as evidence of the unauthorized access revealed several Internet addresses tied to systems at the U.S. Department of Transportation, the National Institutes of Health (NIH), and U.S. Citizenship and Immigration Services (USCIS), a component of the U.S. Department of Homeland Security that manages the nation’s naturalization and immigration system.

Other domains and Internet addresses included in those screenshots pointed to Miracle Systems LLC, an Arlington, Va. based IT contractor that states on its site that it serves 20+ federal agencies as a prime contractor, including the aforementioned agencies.

In an interview with KrebsOnSecurity, Miracle Systems CEO Sandesh Sharda confirmed that the auction concerned credentials and databases were managed by his company, and that an investigating agent from the Secret Service was in his firm’s offices at that very moment looking into the matter.

But he maintained that the purloined data shown in the screenshots was years-old and mapped only to internal test systems that were never connected to its government agency clients.

“The Secret Service came to us and said they’re looking into the issue,” Sharda said. “But it was all old stuff [that was] in our own internal test environment, and it is no longer valid.”

Still, Sharda did acknowledge information shared by Wisconsin-based security firm Hold Security, which alerted KrebsOnSecurity to this incident, indicating that at least eight of its internal systems had been compromised on three separate occasions between November 2018 and July 2019 by Emotet, a malware strain usually distributed via malware-laced email attachments that typically is used to deploy other malicious software.

The Department of Homeland Security did not respond to requests for comment, nor did the Department of Transportation. A spokesperson for the NIH said the agency had investigated the activity and found it was not compromised by the incident.

“As is the case for all agencies of the Federal Government, the NIH is constantly under threat of cyber-attack,” NIH spokesperson Julius Patterson said. “The NIH has a comprehensive security program that is continuously monitoring and responding to security events, and cyber-related incidents are reported to the Department of Homeland Security through the HHS Computer Security Incident Response Center.”

One of several screenshots offered by the dark web seller as proof of access to a federal IT contractor later identified as Arlington, Va. based Miracle Systems. Image: Hold Security.

Continue reading →

‘Satori’ IoT Botnet Operator Pleads Guilty

September 4, 2019
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A 21-year-old man from Vancouver, Wash. has pleaded guilty to federal hacking charges tied to his role in operating the “Satori” botnet, a crime machine powered by hacked Internet of Things (IoT) devices that was built to conduct massive denial-of-service attacks targeting Internet service providers, online gaming platforms and Web hosting companies.

Kenneth “Nexus-Zeta” Schuchman, in an undated photo.

Kenneth Currin Schuchman pleaded guilty to one count of aiding and abetting computer intrusions. Between July 2017 and October 2018, Schuchman was part of a conspiracy with at least two other unnamed individuals to develop and use Satori in large scale online attacks designed to flood their targets with so much junk Internet traffic that the targets became unreachable by legitimate visitors.

According to his plea agreement, Schuchman — who went by the online aliases “Nexus” and “Nexus-Zeta” — worked with at least two other individuals to build and use the Satori botnet, which harnessed the collective bandwidth of approximately 100,000 hacked IoT devices by exploiting vulnerabilities in various wireless routers, digital video recorders, Internet-connected security cameras, and fiber-optic networking devices.

Satori was originally based on the leaked source code for Mirai, a powerful IoT botnet that first appeared in the summer of 2016 and was responsible for some of the largest denial-of-service attacks ever recorded (including a 620 Gbps attack that took KrebsOnSecurity offline for almost four days).

Throughout 2017 and into 2018, Schuchman worked with his co-conspirators — who used the nicknames “Vamp” and “Drake” — to further develop Satori by identifying and exploiting additional security flaws in other IoT systems.

Schuchman and his accomplices gave new monikers to their IoT botnets with almost each new improvement, rechristening their creations with names including “Okiru,” and “Masuta,” and infecting up to 700,000 compromised systems.

The plea agreement states that the object of the conspiracy was to sell access to their botnets to those who wished to rent them for launching attacks against others, although it’s not clear to what extent Schuchman and his alleged co-conspirators succeeded in this regard.

Even after he was indicted in connection with his activities in August 2018, Schuchman created a new botnet variant while on supervised release. At the time, Schuchman and Drake had something of a falling out, and Schuchman later acknowledged using information gleaned by prosecutors to identify Drake’s home address for the purposes of “swatting” him.

Swatting involves making false reports of a potentially violent incident — usually a phony hostage situation, bomb threat or murder — to prompt a heavily-armed police response to the target’s location. According to his plea agreement, the swatting that Schuchman set in motion in October 2018 resulted in “a substantial law enforcement response at Drake’s residence.” Continue reading →

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Spam In your Calendar? Here’s What to Do.

September 3, 2019
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Many spam trends are cyclical: Spammers tend to switch tactics when one method of hijacking your time and attention stops working. But periodically they circle back to old tricks, and few spam trends are as perennial as calendar spam, in which invitations to click on dodgy links show up unbidden in your digital calendar application from Apple, Google and Microsoft. Here’s a brief primer on what you can do about it.

Image: Reddit

Over the past few weeks, a good number of readers have written in to say they feared their calendar app or email account was hacked after noticing a spammy event had been added to their calendars.

The truth is, all that a spammer needs to add an unwelcome appointment to your calendar is the email address tied to your calendar account. That’s because the calendar applications from Apple, Google and Microsoft are set by default to accept calendar invites from anyone.

Calendar invites from spammers run the gamut from ads for porn or pharmacy sites, to claims of an unexpected financial windfall or “free” items of value, to outright phishing attacks and malware lures. The important thing is that you don’t click on any links embedded in these appointments. And resist the temptation to respond to such invitations by selecting “yes,” “no,” or “maybe,” as doing so may only serve to guarantee you more calendar spam.

Fortunately, the are a few simple steps you can take that should help minimize this nuisance. To stop events from being automatically added to your Google calendar: Continue reading →

Feds Allege Adconion Employees Hijacked IP Addresses for Spamming

September 2, 2019
21 Comments

Federal prosecutors in California have filed criminal charges against four employees of Adconion Direct, an email advertising firm, alleging they unlawfully hijacked vast swaths of Internet addresses and used them in large-scale spam campaigns. KrebsOnSecurity has learned that the charges are likely just the opening salvo in a much larger, ongoing federal investigation into the company’s commercial email practices.

Prior to its acquisition, Adconion offered digital advertising solutions to some of the world’s biggest companies, including Adidas, AT&T, Fidelity, Honda, Kohl’s and T-Mobile. Amobee, the Redwood City, Calif. online ad firm that acquired Adconion in 2014, bills itself as the world’s leading independent advertising platform. The CEO of Amobee is Kim Perell, formerly CEO of Adconion.

In October 2018, prosecutors in the Southern District of California named four Adconion employees — Jacob Bychak, Mark Manoogian, Petr Pacas, and Mohammed Abdul Qayyum —  in a ten-count indictment on charges of conspiracy, wire fraud, and electronic mail fraud. All four men have pleaded not guilty to the charges, which stem from a grand jury indictment handed down in June 2017.

‘COMPANY A’

The indictment and other court filings in this case refer to the employer of the four men only as “Company A.” However, LinkedIn profiles under the names of three of the accused show they each work(ed) for Adconion and/or Amobee.

Mark Manoogian is an attorney whose LinkedIn profile states that he is director of legal and business affairs at Amobee, and formerly was senior business development manager at Adconion Direct; Bychak is listed as director of operations at Adconion Direct; Quayyum’s LinkedIn page lists him as manager of technical operations at Adconion. A statement of facts filed by the government indicates Petr Pacas was at one point director of operations at Company A (Adconion).

According to the indictment, between December 2010 and September 2014 the defendants engaged in a conspiracy to identify or pay to identify blocks of Internet Protocol (IP) addresses that were registered to others but which were otherwise inactive.

The government alleges the men sent forged letters to an Internet hosting firm claiming they had been authorized by the registrants of the inactive IP addresses to use that space for their own purposes.

“Members of the conspiracy would use the fraudulently acquired IP addresses to send commercial email (‘spam’) messages,” the government charged.

HOSTING IN THE WIND

Prosecutors say the accused were able to spam from the purloined IP address blocks after tricking the owner of Hostwinds, an Oklahoma-based Internet hosting firm, into routing the fraudulently obtained IP addresses on their behalf.

Hostwinds owner Peter Holden was the subject of a 2015 KrebsOnSecurity story titled, “Like Cutting Off a Limb to Save the Body,” which described how he’d initially built a lucrative business catering mainly to spammers, only to later have a change of heart and aggressively work to keep spammers off of his network.

That a case of such potential import for the digital marketing industry has escaped any media attention for so long is unusual but not surprising given what’s at stake for the companies involved and for the government’s ongoing investigations.

Adconion’s parent Amobee manages ad campaigns for some of the world’s top brands, and has every reason not to call attention to charges that some of its key employees may have been involved in criminal activity.

Meanwhile, prosecutors are busy following up on evidence supplied by several cooperating witnesses in this and a related grand jury investigation, including a confidential informant who received information from an Adconion employee about the company’s internal operations. Continue reading →

Phishers are Angling for Your Cloud Providers

August 30, 2019
37 Comments

Many companies are now outsourcing their marketing efforts to cloud-based Customer Relationship Management (CRM) providers. But when accounts at those CRM providers get hacked or phished, the results can be damaging for both the client’s brand and their customers. Here’s a look at a recent CRM-based phishing campaign that targeted customers of Fortune 500 construction equipment vendor United Rentals.

Stamford, Ct.-based United Rentals [NYSE:URI] is the world’s largest equipment rental company, with some 18,000 employees and earnings of approximately $4 billion in 2018. On August 21, multiple United Rental customers reported receiving invoice emails with booby-trapped links that led to a malware download for anyone who clicked.

While phony invoices are a common malware lure, this particular campaign sent users to a page on United Rentals’ own Web site (unitedrentals.com).

A screen shot of the malicious email that spoofed United Rentals.

In a notice to customers, the company said the unauthorized messages were not sent by United Rentals. One source who had at least two employees fall for the scheme forwarded KrebsOnSecurity a response from UR’s privacy division, which blamed the incident on a third-party advertising partner.

“Based on current knowledge, we believe that an unauthorized party gained access to a vendor platform United Rentals uses in connection with designing and executing email campaigns,” the response read.

“The unauthorized party was able to send a phishing email that appears to be from United Rentals through this platform,” the reply continued. “The phishing email contained links to a purported invoice that, if clicked on, could deliver malware to the recipient’s system. While our investigation is continuing, we currently have no reason to believe that there was unauthorized access to the United Rentals systems used by customers, or to any internal United Rentals systems.”

United Rentals told KrebsOnSecurity that its investigation so far reveals no compromise of its internal systems.

“At this point, we believe this to be an email phishing incident in which an unauthorized third party used a third-party system to generate an email campaign to deliver what we believe to be a banking trojan,” said Dan Higgins, UR’s chief information officer.

United Rentals would not name the third party marketing firm thought to be involved, but passive DNS lookups on the UR subdomain referenced in the phishing email (used by UL for marketing since 2014 and visible in the screenshot above as “wVw.unitedrentals.com”) points to Pardot, an email marketing division of cloud CRM giant Salesforce. Continue reading →

Ransomware Bites Dental Data Backup Firm

August 29, 2019
65 Comments

PerCSoft, a Wisconsin-based company that manages a remote data backup service relied upon by hundreds of dental offices across the country, is struggling to restore access to client systems after falling victim to a ransomware attack.

West Allis, Wis.-based PerCSoft is a cloud management provider for Digital Dental Record (DDR), which operates an online data backup service called DDS Safe that archives medical records, charts, insurance documents and other personal information for various dental offices across the United States.

The ransomware attack hit PerCSoft on the morning of Monday, Aug. 26, and encrypted dental records for some — but not all — of the practices that rely on DDS Safe.

PercSoft did not respond to requests for comment. But Brenna Sadler, director of  communications for the Wisconsin Dental Association, said the ransomware encrypted files for approximate 400 dental practices, and that somewhere between 80-100 of those clients have now had their files restored.

Sadler said she did not know whether PerCSoft and/or DDR had paid the ransom demand, what ransomware strain was involved, or how much the attackers had demanded.

But updates to PerCSoft’s Facebook page and statements published by both PerCSoft and DDR suggest someone may have paid up: The statements note that both companies worked with a third party software company and were able to obtain a decryptor to help clients regain access to files that were locked by the ransomware.

Update: Several sources are now reporting that PerCSoft did pay the ransom, although it is not clear how much was paid. One member of a private Facebook group dedicated to IT professionals serving the dental industry shared the following screenshot, which is purportedly from a conversation between PerCSoft and an affected dental office, indicating the cloud provider was planning to pay the ransom:

Another image shared by members of that Facebook group indicates the ransomware that attacked PerCSoft is an extremely advanced and fairly recent strain known variously as REvil and Sodinokibi.

Original story:

However, some affected dental offices have reported that the decryptor did not work to unlock at least some of the files encrypted by the ransomware. Meanwhile, several affected dentistry practices said they feared they might be unable to process payroll payments this week as a result of the attack. Continue reading →

Cybersecurity Firm Imperva Discloses Breach

August 27, 2019
83 Comments

Imperva, a leading provider of Internet firewall services that help Web sites block malicious cyberattacks, alerted customers on Tuesday that a recent data breach exposed email addresses, scrambled passwords, API keys and SSL certificates for a subset of its firewall users.

Redwood Shores, Calif.-based Imperva sells technology and services designed to detect and block various types of malicious Web traffic, from denial-of-service attacks to digital probes aimed at undermining the security of Web-based software applications.

Image: Imperva

Earlier today, Imperva told customers that it learned on Aug. 20 about a security incident that exposed sensitive information for some users of Incapsula, the company’s cloud-based Web Application Firewall (WAF) product.

“On August 20, 2019, we learned from a third party of a data exposure that impacts a subset of customers of our Cloud WAF product who had accounts through September 15, 2017,” wrote Heli Erickson, director of analyst relations at Imperva.

“We want to be very clear that this data exposure is limited to our Cloud WAF product,” Erickson’s message continued. “While the situation remains under investigation, what we know today is that elements of our Incapsula customer database from 2017, including email addresses and hashed and salted passwords, and, for a subset of the Incapsula customers from 2017, API keys and customer-provided SSL certificates, were exposed.”

Companies that use the Incapsula WAF route all of their Web site traffic through the service, which scrubs the communications for any suspicious activity or attacks and then forwards the benign traffic on to its intended destination.

Rich Mogull, founder and vice president of product at Kansas City-based cloud security firm DisruptOps, said Imperva is among the top three Web-based firewall providers in business today.

According to Mogull, an attacker in possession of a customer’s API keys and SSL certificates could use that access to significantly undermine the security of traffic flowing to and from a customer’s various Web sites.

At a minimum, he said, an attacker in possession of these key assets could reduce the security of the WAF settings and exempt or “whitelist” from the WAF’s scrubbing technology any traffic coming from the attacker. A worst-case scenario could allow an attacker to intercept, view or modify traffic destined for an Incapsula client Web site, and even to divert all traffic for that site to or through a site owned by the attacker. Continue reading →

Breach at Hy-Vee Supermarket Chain Tied to Sale of 5M+ Stolen Credit, Debit Cards

August 22, 2019
82 Comments

On Tuesday of this week, one of the more popular underground stores peddling credit and debit card data stolen from hacked merchants announced a blockbuster new sale: More than 5.3 million new accounts belonging to cardholders from 35 U.S. states. Multiple sources now tell KrebsOnSecurity that the card data came from compromised gas pumps, coffee shops and restaurants operated by Hy-Vee, an Iowa-based company that operates a chain of more than 245 supermarkets throughout the Midwestern United States.

Hy-Vee, based in Des Moines, announced on Aug. 14 it was investigating a data breach involving payment processing systems that handle transactions at some Hy-Vee fuel pumps, drive-thru coffee shops and restaurants.

The restaurants affected include Hy-Vee Market Grilles, Market Grille Expresses and Wahlburgers locations that the company owns and operates. Hy-Vee said it was too early to tell when the breach initially began or for how long intruders were inside their payment systems.

But typically, such breaches occur when cybercriminals manage to remotely install malicious software on a retailer’s card-processing systems. This type of point-of-sale malware is capable of copying data stored on a credit or debit card’s magnetic stripe when those cards are swiped at compromised payment terminals. This data can then be used to create counterfeit copies of the cards.

Hy-Vee said it believes the breach does not affect payment card terminals used at its grocery store checkout lanes, pharmacies or convenience stores, as these systems rely on a security technology designed to defeat card-skimming malware.

“These locations have different point-of-sale systems than those located at our grocery stores, drugstores and inside our convenience stores, which utilize point-to-point encryption technology for processing payment card transactions,” Hy-Vee said. “This encryption technology protects card data by making it unreadable. Based on our preliminary investigation, we believe payment card transactions that were swiped or inserted on these systems, which are utilized at our front-end checkout lanes, pharmacies, customer service counters, wine & spirits locations, floral departments, clinics and all other food service areas, as well as transactions processed through Aisles Online, are not involved.”

According to two sources who asked not to be identified for this story — including one at a major U.S. financial institution — the card data stolen from Hy-Vee is now being sold under the code name “Solar Energy,” at the infamous Joker’s Stash carding bazaar.

An ad at the Joker’s Stash carding site for “Solar Energy,” a batch of more than 5 million credit and debit cards sources say was stolen from customers of supermarket chain Hy-Vee.

Hy-Vee said the company’s investigation is continuing.

“We are aware of reports from payment processors and the card networks of payment data being offered for sale and are working with the payment card networks so that they can identify the cards and work with issuing banks to initiate heightened monitoring on accounts,” Hy-Vee spokesperson Tina Pothoff said. Continue reading →

Forced Password Reset? Check Your Assumptions

August 21, 2019
110 Comments

Almost weekly now I hear from an indignant reader who suspects a data breach at a Web site they frequent that has just asked the reader to reset their password. Further investigation almost invariably reveals that the password reset demand was not the result of a breach but rather the site’s efforts to identify customers who are reusing passwords from other sites that have already been hacked.

But ironically, many companies taking these proactive steps soon discover that their explanation as to why they’re doing it can get misinterpreted as more evidence of lax security. This post attempts to unravel what’s going on here.

Over the weekend, a follower on Twitter included me in a tweet sent to California-based job search site Glassdoor, which had just sent him the following notice:

The Twitter follower expressed concern about this message, because it suggested to him that in order for Glassdoor to have done what it described, the company would have had to be storing its users’ passwords in plain text. I replied that this was in fact not an indication of storing passwords in plain text, and that many companies are now testing their users’ credentials against lists of hacked credentials that have been leaked and made available online.

The reality is Facebook, Netflix and a number of big-name companies are regularly combing through huge data leak troves for credentials that match those of their customers, and then forcing a password reset for those users. Some are even checking for password re-use on all new account signups.

The idea here is to stymie a massively pervasive problem facing all companies that do business online today: Namely, “credential-stuffing attacks,” in which attackers take millions or even billions of email addresses and corresponding cracked passwords from compromised databases and see how many of them work at other online properties.

So how does the defense against this daily deluge of credential stuffing work? A company employing this strategy will first extract from these leaked credential lists any email addresses that correspond to their current user base.

From there, the corresponding cracked (plain text) passwords are fed into the same process that the company relies upon when users log in: That is, the company feeds those plain text passwords through its own password “hashing” or scrambling routine.

Password hashing is designed to be a one-way function which scrambles a plain text password so that it produces a long string of numbers and letters. Not all hashing methods are created equal, and some of the most commonly used methods — MD5 and SHA-1, for example — can be far less secure than others, depending on how they’re implemented (more on that in a moment). Whatever the hashing method used, it’s the hashed output that gets stored, not the password itself.

Back to the process: If a user’s plain text password from a hacked database matches the output of what a company would expect to see after running it through their own internal hashing process, that user is then prompted to change their password to something truly unique. Continue reading →

The Rise of “Bulletproof” Residential Networks

August 19, 2019
58 Comments

Cybercrooks increasingly are anonymizing their malicious traffic by routing it through residential broadband and wireless data connections. Traditionally, those connections have been mainly hacked computers, mobile phones, or home routers. But this story is about so-called “bulletproof residential VPN services” that appear to be built by purchasing or otherwise acquiring discrete chunks of Internet addresses from some of the world’s largest ISPs and mobile data providers.

In late April 2019, KrebsOnSecurity received a tip from an online retailer who’d seen an unusual number of suspicious transactions originating from a series of Internet addresses assigned to a relatively new Internet provider based in Maryland called Residential Networking Solutions LLC.

Now, this in itself isn’t unusual; virtually every provider has the occasional customers who abuse their access for fraudulent purposes. But upon closer inspection, several factors caused me to look more carefully at this company, also known as “Resnet.”

An examination of the IP address ranges assigned to Resnet shows that it maintains an impressive stable of IP blocks — totaling almost 70,000 IPv4 addresses — many of which had until quite recently been assigned to someone else.

Most interestingly, about ten percent of those IPs — more than 7,000 of them — had until late 2018 been under the control of AT&T Mobility. Additionally, the WHOIS registration records for each of these mobile data blocks suggest Resnet has been somehow reselling data services for major mobile and broadband providers, including AT&T, Verizon, and Comcast Cable.

The WHOIS records for one of several networks associated with Residential Networking Solutions LLC.

Drilling down into the tracts of IPs assigned to Resnet’s core network indicates those 7,000+ mobile IP addresses under Resnet’s control were given the label  “Service Provider Corporation” — mostly those beginning with IPs in the range 198.228.x.x.

An Internet search reveals this IP range is administered by the Wireless Data Service Provider Corporation (WDSPC), a non-profit formed in the 1990s to manage IP address ranges that could be handed out to various licensed mobile carriers in the United States.

Back when the WDSPC was first created, there were quite a few mobile wireless data companies. But today the vast majority of the IP space managed by the WDSPC is leased by AT&T Mobility and Verizon Wireless — which have gradually acquired most of their competing providers over the years.

A call to the WDSPC revealed the nonprofit hadn’t leased any new wireless data IP space in more than 10 years. That is, until the organization received a communication at the beginning of this year that it believed was from AT&T, which recommended Resnet as a customer who could occupy some of the company’s mobile data IP address blocks.

“I’m afraid we got duped,” said the person answering the phone at the WDSPC, while declining to elaborate on the precise nature of the alleged duping or the medium that was used to convey the recommendation.

AT&T declined to discuss its exact relationship with Resnet  — or if indeed it ever had one to begin with. It responded to multiple questions about Resnet with a short statement that said, “We have taken steps to terminate this company’s services and have referred the matter to law enforcement.”

Why exactly AT&T would forward the matter to law enforcement remains unclear. But it’s not unheard of for hosting providers to forge certain documents in their quest for additional IP space, and anyone caught doing so via email, phone or fax could be charged with wire fraud, which is a federal offense that carries punishments of up to $500,000 in fines and as much as 20 years in prison.

WHAT IS RESNET?

The WHOIS registration records for Resnet’s main Web site, resnetworking[.]com, are hidden behind domain privacy protection. However, a cursory Internet search on that domain turned up plenty of references to it on Hackforums[.]net, a sprawling community that hosts a seemingly never-ending supply of up-and-coming hackers seeking affordable and anonymous ways to monetize various online moneymaking schemes.

One user in particular — a Hackforums member who goes by the nickname “Profitvolt” — has spent several years advertising resnetworking[.]com and a number of related sites and services, including “unlimited” AT&T 4G/LTE data services, and the immediate availability of more than 1 million residential IPs that he suggested were “perfect for botting, shoe buying.”

The Hackforums user “Profitvolt” advertising residential proxies.

Profitvolt advertises his mobile and residential data services as ideal for anyone who wishes to run “various bots,” or “advertising campaigns.” Those services are meant to provide anonymity when customers are doing things such as automating ad clicks on platforms like Google Adsense and Facebook; generating new PayPal accounts; sneaker bot activity; credential stuffing attacks; and different types of social media spam.

For readers unfamiliar with this term, “shoe botting” or “sneaker bots” refers to the use of automated bot programs and services that aid in the rapid acquisition of limited-release, highly sought-after designer shoes that can then be resold at a profit on secondary markets. All too often, it seems, the people who profit the most in this scheme are using multiple sets of compromised credentials from consumer accounts at online retailers, and/or stolen payment card data.

To say shoe botting has become a thorn in the side of online retailers and regular consumers alike would be a major understatement: A recent State of The Internet Security Report (PDF) from Akamai (an advertiser on this site) noted that such automated bot activity now accounts for almost half of the Internet bandwidth directed at online retailers. The prevalance of shoe botting also might help explain Footlocker‘s recent $100 million investment in goat.com, the largest secondary shoe resale market on the Web.

In other discussion threads, Profitvolt advertises he can rent out an “unlimited number” of so-called “residential proxies,” a term that describes home or mobile Internet connections that can be used to anonymously relay Internet traffic for a variety of dodgy deals.

From a ne’er-do-well’s perspective, the beauty of routing one’s traffic through residential IPs is that few online businesses will bother to block malicious or suspicious activity emanating from them.

That’s because in general the pool of IP addresses assigned to residential or mobile wireless connections cycles intermittently from one user to the next, meaning that blacklisting one residential IP for abuse or malicious activity may only serve to then block legitimate traffic (and e-commerce) from the next user who gets assigned that same IP. Continue reading →